Weak peso is 'good news' for PHL economy – economist

The weak peso, which has lingered within five-year lows since late last month, provides support to the Philippine economy, according to an economist.

 

"The depreciation of our peso is very good for the economy. It puts us in a very good position," Solita "Winnie" Collas-Monsod said in an interview on GMA News' News to Go on Tuesday.

 

While imported goods will become more expensive, the weaker peso supposedly will encourage Filipino consumers to patronize local products and make our exports more attractive in the global market.

 

"Hindi tayo masyadong bibili ng mga imported goods, mas bibili tayo ng local goods. Tapos, ang mga tao sa labas, mag-import ng Philippine goods dahil mura sa kanila," Monsod said. 

 

The economist also downplayed possible price increases in fuel products, one of the Philippines' main imports.

 

"Ang fuel ngayon ay very cheap so that's no problem to us now. And besides, if fuel is expensive, we will be less wasteful," Monsod noted.

 

The current level of the peso against the dollar is particularly beneficial to the families of an estimated 10 million overseas Filipinos, providing them with more money to spend. This, in turn, tends to boost the Philippine economy that is largely driven by domestic consumption. 

 

"Ang downside to that, of course, is that it makes the servicing of our foreign debt more expensive, kasi ang utang natin sa mga dayuhan ay, siempre, dolyar. Kung mataas ang presyo ng dolyar, kagaya ngayon, tataas ang presyo in terms of pesos," Monsod said.

 

The peso settled at 46.815:$1 on Monday, on concerns over the slowdown in the Chinese economy and the political unrest in Greece that threatens the ongoing Greek debt bailout. It was lowest level for the peso since June 2010.

 

The developments abroad, particularly the Chinese stock market rout and the impending increase in US interest rates, have also pushed the Philippine Stock Exchange below the 7,000-level on Monday.

 

"Frankly, I don't care about the stock market because the stock market benefits so very few Filipinos. The Filipino poor don't [trade] in the stock market, not even the middle class. It's only the upper class so why are you getting so worried?" Monsod said. – VS, GMA News